A Heightened Agenda

To hear it from executives attending the American Chemistry Council’s annual meeting, it’s both the best of times and the worst of times for the association and the industry it represents. Chemical companies are recovering from the recession nicely, and ACC is doing great, but many in the industry feel besieged on the legislative and regulatory fronts.

“In all of my 34 years in this industry, I’ve never seen a more challenging time,” J. Brian Ferguson, chairman of Eastman Chemical and head of ACC’s executive committee, told attendees at the event, which was held earlier this month at the Broadmoor Hotel in Colorado Springs, Colo.

Ferguson described an erosion of public faith in institutions ranging from banks and large corporations to government and labor unions. The BP oil spill in the Gulf of Mexico has only accelerated this public discontent. “All of our institutions face a crisis of trust,” he said, “and as we all know, the chemical industry and our products remain at the front—or very near the front—of that line.”

Zealous regulators and legislators are adding to the chemical industry’s woes. At a briefing for reporters, Ferguson said he and his colleagues feel “under siege” from the Obama Administration’s agenda.

“We face a barrage of legislative and regulatory initiatives that we feel will damage the industry,” Ferguson said. “We anticipated that this would be the most aggressive policy environment many of us have faced in our entire careers, and that has been borne out.”

As ACC sees it, the challenging initiatives include a draconian modernization of the Toxic Substances Control Act (TSCA), implementation of chemical safety legislation mandating that dangerous manufacturing processes be replaced with safer ones, and Environmental Protection Agency regulation of greenhouse gas emissions. Meanwhile, the drumbeat of bad publicity on bisphenol A, phthalates, and plastic bags is accompanied by the possibility of state-level product bans.

ACC’s response to threats against chemicals that it believes are safe and effective has been to ratchet up its product advocacy efforts and to mobilize politically in congressional districts to an unprecedented degree. Overall, the association says it is devoting 58% of its resources to this kind of advocacy, up from only 28% just two years ago.

Lisa B. Harrison, ACC’s vice president of communications, explained that the district-level effort is largely the brainchild of Calvin M. Dooley, ACC’s president and chief executive officer, who was a Democratic member of the House of Representatives from 1991 to 2005. “Cal knows from his days as a congressman that what he reads in the local paper is more important than what he reads in the Washington Post,” she said.

Harrison recently reorganized ACC’s communications department so that it can better support what she calls “in-district advocacy.” Also supporting such advocacy, she said, is the association’s new drive for small-company members, because legislators are highly attuned to the voices of small businesses in their districts.

A third initiative is ACC’s political mobilization department, which was formed about six months ago and now has four staffers. At the press briefing, Dooley said the new department is targeting districts led by legislators who are not necessarily industry backers but who are open to talking with ACC.

For example, the department recently facilitated a meeting in the Georgia district of Rep. John Barrow (D) that was attended by executives from a local ACC member company. The topic discussed, Dooley said, was the pain firms would feel if TSCA reform draft legislation now in the House Energy & Commerce Committee gets enacted into law.

Barrow, who is on the committee, is a member of the Blue Dog Coalition, a group of fiscally conservative Democrats. “We anticipate that the Republicans will align with us, and we need eight Democrats,” Dooley said. “We have defined the universe of Democrats who we think are potential supporters of our priorities.”

ACC’s focus on district-level initiatives is at the expense of broader public-outreach efforts. A year ago, the association wound down its $20 million-per-year national advertising program, conducted under the “essential₂” banner. In its place ACC started a more modest Web-oriented outreach campaign orchestrated by Racepoint Group, a public relations agency. But even that has been shut down, Harrison said. Instead, ACC will launch short-term outreach efforts as issues crop up in important states and districts.

The challenges facing the industry might be many, but the association contends that it has the financial and membership strength to confront them. At the press briefing, Dooley noted that ACC has signed up 13 new members over the past year, many of them the smaller companies it is pursuing. Retention of existing members—now about 145—is high, he added.

Over the past two years, the association has cut dues by almost 28% and reduced its own expenditures by 20%, Dooley said. At the same time, its reserves have risen from $9 million in 2008 to $34 million today. “I don’t think ACC has ever been in stronger financial shape,” he said, “and I don’t think ACC has ever had stronger support from its members.”